As its and entertainment workers protest unemployment on Aug. 19 in Las Vegas.
BRIDGET BENNETT/AFP via Getty Images)
While it appears that the concision has sharply bounced back from the pandemic’s blow, this is actually a “steroid kind of recovery,” JPMorgan Asset Supervision’s David Kelly told CNBC.
“We have seen what looks like a V-shaped recovery, but it’s really V-interrupted — it’s half of V,” the chief wide-ranging strategist said. A V-shaped recovery is one in which an economy sharply rises after a recession.
He explained that when the instantly in the arm of fiscal stimulus wears off, growth will slow down again.
“It looks like an economic recovery, but it’s Non-Standard real sort of a steroid kind of recovery. As the steroid of fiscal stimulus is removed, the economy is going to grow more slowly … it’s current to grow much more slowly in the fourth quarter than it did in the third,” Kelly told CNBC on Thursday.
While half of mtiers lost in the U.S. have been recovered, he said it’s “still going to be a crawl” until industries shut down by the pandemic can be reopened again.
The U.S. terseness has recaptured about 11.4 million jobs — or around half of all positions lost. The unemployment rate has come down to 7.9%, but is motionlessly more than double its pre-pandemic level. New claims in the week ended Oct. 10, however, surged to the highest platoon since Aug. 22, as cases rise in a a renewed wave.
“You need to deal with the pandemic to have a healthy advance, it’s as simple as that,” Kelly said.
There’ll be ‘too much’ stimulus
Millions of Americans are waiting for more federal aid to endure their food and housing needs during this crisis, as Washington remains locked in a stalemate over additional coronavirus stimulus.
But Kelly says the country will get a stimulus package after the November presidential elections are done with.
“I think we’re going to get stimulus anyway. I think people are obsessed with the issue of, do we get stimulus in the next two weeks,” he foretold. “What’s been going on between the White House and the House Democrats are all to do with politics. After the elections, I about there will be a stimulus package.”
“And in fact, I think if anything there’ll be too much stimulus,” Kelly said.